Tesla roof challenges solar panel industry

1of 3SolarCity and Tesla Motors unveil four styles of solar roofs last year. The tiles contain solar cells and cost about triple the cost of a traditional solar-panel system.Photo: SolarCity/Tesla Motors

Elon Musk has set his sights on the solar industry, and industry veterans and technophiles alike can’t stop talking about his latest entry into the market. Of course, it wouldn’t be a Tesla product if it didn’t redefine an entire product category. The company is promising a first-of-its-kind technology that pairs high-end glass roof tiles with hidden solar cells to create an integrated “solar roof.” The product is generating some of the biggest buzz that the industry has seen in years — but it could also threaten the very industry Musk hopes to reinvigorate.

California homeowners are the first to have access when installations start this month. When Tesla revealed the initial designs, homeowners who had never considered installing traditional solar panels found themselves taking a second look. With a single product announcement, Musk did the same for solar as he famously did for electric cars: He made it cool.

Solar panels have become much more efficient and affordable in the past few decades, but their fundamental design and aesthetics were more or less unchanged. Traditional solar panels are designed for the singular purpose of producing solar energy. The Tesla solar roof is different. At its core, it’s a luxury roof product that offers electricity production capabilities as an added bonus — and it comes with a price tag to match.

By promoting his newest roofing innovation as a replacement for standard solar panels, Musk is misleading consumers who may not realize that the cost of the Tesla solar roof will be equivalent to both installing a new high-end roof and buying a traditional solar system. As a result of this ambiguity, prospective solar customers are taking a “wait and see” approach.

By delaying their solar decisions, these homeowners are making it even more difficult for rooftop solar installers to find new business at a time when growth in key markets like California is slowing. This slowdown is due to a dramatic shift in consumer preference toward system ownership.

Musk says the product will cost “less than a traditional roof,” once you add in the value of the solar electricity that it generates. What this language obscures is that, by the best estimates available, the solar roof could still cost upward of $63,000 — more than triple the cost of a traditional solar-panel system — yet offers significantly less electricity production per square foot. For homeowners who don’t also need to replace their roof, the high price tag can’t be justified.

It’s true that by giving traditional solar panels a dramatic face lift, Musk has expanded the market of would-be buyers. However, consumers need to wait until more accurate information about the solar roof’s price tag and electricity production capabilities is available.

This isn’t to say that there isn’t space in the market for Tesla’s solar roof. The product is simply in a different category from traditional solar panels in terms of cost, long-term savings, and yes, aesthetics. The Tesla solar roof should be viewed as a well-designed luxury roofing product first — its solar production benefits are an additional benefit, but not its core offering.

Musk may be generating much-needed excitement for the industry, but withholding key product information from prospective solar adopters for the sake of hype won’t bring about the sustainable energy economy he envisions. Until more comprehensive, transparent information about the all-in costs of the Tesla solar roof are made available, his revolutionary product may only take the wind out of the rest of the solar industry’s sails.

Vikram Aggarwal is the CEO and founder of EnergySage, an online solar marketplace backed by the U.S. Department of Energy.